USDA surprises with deep cut to corn harvest on drought
Source: REUTERS
(Reuters) - The worst Midwest drought in a quarter century is doing more damage to U.S. crops than widely believed, already shrinking corn yields to the lowest in nearly a decade, the government said on Wednesday.
In a report that reignited a near-record rally in grain prices, the U.S. Department of Agriculture said the crop will average just 146.0 bushels an acre, down 20 bushels from its June estimate and lower than analysts' estimates just a week ago. One official said it was the biggest such cut he could recall.
The dramatic scaling back of what had initially been forecast to be a record harvest has sent corn and soybean prices up by more than a third over the past month, as extreme heat and dry conditions stunt corn growth in the world's largest grower and exporter.
Corn prices raced more than 3 percent higher and soybeans were close to a record high on Wednesday before profit taking and forecasts for slightly wetter weather curtailed gains. Prices are still up more than a third over the past month as the drought threatens to set off another year of food price inflation and supply concerns.
Read more: http://www.reuters.com/article/2012/07/11/us-usa-crops-idUSBRE86A0LL20120711
This is bad news. What is corn used to make? It's probably easier to ask what corn isn't used to make.
PB
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